Mortgage Refinance Applications Increased in Weekly Survey; Purchase Applications Declined

by Calculated Risk on 2/05/2025 07:00:00 AM

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 2.2 percent from one
week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage
Applications Survey for the week ending January 31, 2025. Last week’s results include an adjustment for
the Martin Luther King holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.2 percent on
a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 19
percent compared with the previous week. The Refinance Index increased 12 percent from the previous
week and was 17 percent higher than the same week one year ago. The seasonally adjusted Purchase
Index decreased 4 percent from one week earlier. The unadjusted Purchase Index increased 15 percent
compared with the previous week and was 0.2 percent higher than the same week one year ago.

“Mortgage rates moved lower last week, consistent with lower Treasury yields following the FOMC
meeting and a volatile week for stock market. The 30-year fixed rate declined to its lowest level in six
weeks at 6.97 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Mortgage
applications responded to these lower rates and were up for the week overall, driven by a 12 percent
increase in refinance applications, which had their strongest week since December 2024.”

Added Kan, “Purchase activity had a tougher week, with declines across all loan types. The average loan
size for a purchase loan has increased since the start of the year and continued that trend last week with
weaker government purchase activity, which reached $447,300, the highest level since October 2024.”

…
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($766,550 or less) decreased to 6.97 percent from 7.02 percent, with points increasing to 0.64 from 0.63
(including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is up 0.2% year-over-year unadjusted. 

Red is a four-week average (blue is weekly).  

Purchase application activity is up about 25% from the lows in late October 2023 and is now 4% above the lowest levels during the housing bust.